LAKEPORT – A developer whose bid to purchase the land underneath the Vista Point Shopping Center from the city last summer was turned down is suing the city, its mayor and the man who, ultimately, purchased the property.
The lawsuit by Barry Johnson of Superior Acquisitions was filed April 22 in Lake County Superior Court. Its focus is the shopping center, located on Lakeport Boulevard near the junction with Highway 29.
Defendants named in the suit include the city, Mayor Willis “Buzz” Bruns, and Matthew Riveras and his company Donica LLC, which holds the Vista Point property.
Just how much the suit could cost the city isn't clear. Johnson's suit doesn't ask for a specific amount, although it claims at various points that the defendants are responsible for the tort damages Superior suffered, in an amount of not less than $2,625,000.
The suit also could cost the city in other ways. Although City Attorney Steve Brookes said he will represent the city and Bruns in his capacity as mayor, Brookes added that he's a potential witness in the case, which will likely require co-counsel or an outside attorney.
Brooke said all of the parties are now attempting mediation in the suit, including the parties involved in a separate foreclosure action against Meridian Investments of Oakland, who still holds the lease on the 113,288 square foot shopping center, as Lake County News has reported.
“There's a lot of lawyers,” said Brookes.
Johnson said he attempted to mediate the issues before filing the lawsuit but no one was interested, which finally led him to the legal action. No mediation dates have been set.
“If they're going to come to the table in good faith and want to be reasonable, I'm open to that,” said Johnson.
In the suit Johnson alleges that the city acted inappropriately in choosing to go with the $1,001,000 bid offered by Riveras, who is Brun's son-in-law.
Johnson told Lake County News that in 2004 he entered an exclusive negotiating agreement with the city to purchase the property beneath the shopping center.
At the same time, he said he was negotiating with Meridian Investments and its principal, Bill Walters, to purchase the lease in order to unite the land and lease and be able to move forward with redeveloping the property, which had largely fallen into disrepair.
Johnson said he paid for a property appraisal and was willing to move forward with the purchase when the city said that it needed to have a parcel map done before the sale could be completed.
The property map, he said, took the city 25 months to complete, and once it was done the city didn't honor what he believes was his right to continue, and complete, a sales transaction.
But Brookes, who was involved with the Vista Point sale, said Johnson was told that the agreement had ended.
“The exclusive negotiating agreement, in my world, ended in 2004,” said Brookes.
He said there was a window of time in October 2004 when a sales price needed to be settled upon following the appraisal. “There was no agreement between the city and Superior (Acquisitions).”
Johnson, however, denies that he was told that the agreement had ended.
City begins to market the property
Once the parcel map finally was accepted by the City Council in April 2007, the city began advertising the property for sale. Brookes sent out a letter inviting bid proposals.
A March 2006 appraisal had valued the land at $900,000, as reported on this site.
Johnson and Riveras were the only two people to submit purchase proposals to the city last summer, as Lake County News has reported.
The two men made their pitch to the council in an Aug. 7 City Council meeting. Afterward, the council went into closed session. However, Bruns and Councilman Jim Irwin sat out.
“I advised both Buzz Bruns and Jim Irwin for different reasons not to participate,” said Brookes.
That was to avoid possible conflicts of interest, said Brookes – in Bruns' case, due to the familial relationship; in Irwin's, because he had a contractual agreement with Riveras for construction of a common fence between two homes they were building in the Land's End neighborhood in Lakeport.
But Johnson alleges that the connection between Bruns and Riveras was “inappropriate.” The suit alleges that city officials, including Brookes and City Manager Jerry Gillham, helped “coach” Riveras in his bid proposal.
Particularly, Johnson took issue with Riveras' bid, which was $900,000 “or $1,000 over the next highest bid,” according to a copy of Riveras' bid letter.
“That's not a bona fide bid,” said Johnson.
Brookes said both Johnson's and Riveras' originally submitted bids had defects, which led them to going before the council Aug. 7, after which the council decided to go with Riveras, who Johnson's suit calls “an under-capitalized, young and inexperienced developer” who was only given the opportunity to purchase the property because of his family connection.
“In sum, City and defendants knowingly chose to enrich Bruns' family, notwithstanding that it would condemn City's residents to continued blight and decay at Vista Point, all in flagrant disregard of the laws of this State and the public trust vested in defendants,” the suit states.
Ultimately, the city has “deliberative privilege” when it comes to selecting one person, or bid, over another, said Brookes.
And Brookes maintained there was no wrongdoing on Bruns' part, because he was not part of the negotiating team. “Whether he chatted with Mr. Riveras about it on some superficial level, I don't know.”
He added, “They're claiming that the fix was in. I just don't think that was accurate.”
Johnson said he “vehemently opposed” Riveras buying the property, but afterward he still approached him to make an offer on the land and was turned down.
“It was never my intent to be adversarial with the city or Riveras,” said Johnson.
But he said Riveras and his company Donica – which was formed in October 2007, at the time of the property purchase – didn't have the credential necessary to meet the city's requirements for redevelopment the property. “It just didn't make good sense.”
Brookes, however, countered by saying, “Donica found $1 million to pay us. At the end of the day that was not an issue.”
Bill Walters, who previously had written a letter to the city asking them to take Johnson's proposal to buy the land – died last August, not long after the city went with Riveras' bid.
In October, Walters' son, Jeff, made a trip to Lakeport from his home on the East Coast, and – in partnership with Presidio Development Partners LLC of San Francisco – attempted to offer $1.2 million for the land, which the city turned down. That same month, according to court documents, Meridian is alleged to have failed to make its lease payment to Park National Bank, which started foreclosure proceedings.
Johnson seeks damages
Saying he suffered damages because he was not permitted to buy the property, Johnson then filed a claim against the city. At the council's Nov. 20 meeting, council members voted to turn down the claim, which Brookes called “skeletal” because it contained no detail or number regarding the damages.
Johnson has been involved in many development projects in the county – including the new Department of Motor Vehicles building on Parallel Drive, Quail Run fitness center and Willow Tree Shopping Center on 11th Street, all in Lakeport; and the Burns Valley Mall in Clearlake. He also owns Willopoint Resort and is a partner in the ownership of the former Outrageous Waters property.
He said he has offered to buy Park National Bank's loan on Meridian's lease, but they haven't responded yet. Riveras also has attempted to purchase the loan but was turned down.
Ultimately, Johnson wants to take control of the Vista Point property and move forward with his plans to redevelop it.
Just as determined to hold the property is Riveras, who chose not to respond directly to the suit, but said that the center “is a valuable piece of property.”
He also said that Johnson's accusations of favoritism toward him on the part of the city “couldn't be further from the truth.”
In a previous interview with Lake County News, Riveras said Johnson's attempts to impugn his reputation and that of his father-in-law were unfair and unfounded.
When everything is settled, Riveras said he's confident he'll be the one developing the property, which he called a “gateway” property.
E-mail Elizabeth Larson at
{mos_sb_discuss:2}
How to resolve AdBlock issue? 
